Continuing the Conversation with Mike Hamilton – Episode #3

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Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.

Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.

Beyond the Challenge podcast is sponsored by Exactuals, perfecting payments and the data driving them.

Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.

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Sandy: Today, we are talking with Mike Hamilton, SVP, Chief Distribution and Marketing, with RBC Insurance, about the challenges faced by carriers to grow their bottom line and stay relevant in a post COVID-19 world. As head sales and distribution, Mike Hamilton is responsible for leading the RBC Insurance sales and distribution team across all of Canada in multiple channels. Mike, welcome to Beyond the Challenge.

Mike: Thanks, Sandy. Great to see you.

Sandy: Can you tell us a little bit about your background?

Mike: It started quite a while back, I would say, 25 years ago. I started with Merrill Lynch, went through their professional development program and became Merrillized down in Princeton, if you will, and built a block of business over the course of seven years and had a relatively successful timeframe. From there, I went to Jackson National Life during all the insurance regulation era with the gentlemen of Bob Saltzman and Dr. Greg Salsbury and, basically, revamped they, as an insurance company at the time, which was roughly an $8 billion company, and over the next three years, we took it to a $65 billion company got into acquisition mode and had quite a bit of success and I learned a ton from that opportunity. From there, I joined a venture capital firm, got involved in mergers and acquisitions of insurance companies and ended up running American Pioneer, Constitution Life, Heritage Health as well as Pennsylvania Life back up in Toronto, Ontario. So I became their global president, if you will, of acquisition of companies that they purchased and the idea was to turn them around, build them to a point that they’d wanna be acquired by a third party and did that very successfully and roughly three to four years later, we sold Pennsylvania Life to La Capitale out of Quebec and then I was recruited by Nationwide out of Columbus, Ohio, as President of their NFN, or Nationwide Financial Network, and all the agents selling property and casualty, life, health, wealth, retirement funds, working alongside people such as Peter Golato and working for Mark Thresher. Great, just a great opportunity and I really enjoyed my time. I spent roughly four years at Nationwide and then RBC recruited me, Royal Bank of Canada, to come up to Toronto to run their insurance network across Canada to revamp it as a multi-line distribution opportunity, both as a manufacturer as well as proprietary brokerage distribution, and that was basically nine years ago and I’ve enjoyed my time since and have had some great successes, challenges, opportunities, and I’ve really enjoyed my time so I continue to hang my hat with RBC today.

Sandy: Mike, so far, insurance carriers have weathered the COVID crisis exceptionally well, largely due to investments they had already made in networks, applications, laptops, and more. The crisis did expose a number of gaps and vulnerabilities. The challenge now facing leading carriers is how to adapt business strategies to accommodate a new way of working and still grow revenue. From your experience, how can insurance carriers embrace innovation and transformation to improve performance and drive long-term growth?

Mike: It’s a great question and I don’t think there’s a magic button on this one, Sandy. But I believe the reality of how to grow for the future is to embrace this innovation, to look at this COVID as an opportunity, especially within business, and to throw away a bit of the rulebook, the old ways of doing things. Again, having been in a number of industry seminars and talking to other companies and being on panels, what I find interesting is we still have — there still is a mindset that we’re gonna get through this and get back to normal. I think the normal’s done. I think the muscle memory of our clients has readjusted. The new clientele, our Gen Z’s and our millennials and Gen Y’s, all wanna do business in a different way, a safe way, and to encompass professionals that embrace their needs. They’re asking something different today than they’ve ever asked. And as opposed to being a mono-line product pitch group, they’re looking for, “How do you manage my risk? How do I attain my goals and solutions over the long term? And how do I continue to be the best I can for the long term? And, oh, by the way, I want it all done right now and can you — all I wanna do is be able to hit a button. Can you help me do that?” And companies need to embrace that. I don’t necessarily think we have all the solutions but having those ideas versus sitting back, waiting for the ultimate change will be challenging.

Sandy: What do you see is RBC’s biggest growth strategy?

Mike: I think when I look at it, the greatest growth opportunity, not only are we developing new products to address new demographics and how we’re engaging our clients on a day-to-day basis, but what I view as the market is more of a generalist format. We built a community within the insurance industry that, “I am a great life insurer,” “I am a great investment insurer,” “I’m a great PNC-er.” I think as we move forward, a generalist format means, “I want all my needs taken care of and I don’t wanna talk to five companies or I don’t wanna talk to five specialists. I want an individual to bring all those resources to bear and take care of my needs because you know who I am, you have my data, and take care of that.” When I think of some of the competitors, you think of an Amazon. Amazon knows the next book you should read just based on what you previously have done. Facebook, based on your interests of the sites you’re going to, knows what other interests you may have. We as an industry need to start thinking like that. We’re far from perfect but I think that’s the next growth opportunity. And being a multi-liner and one of the largest, if not the largest multi-liner in Canada, gives us a great opportunity to do that and specialize as opposed to a mono line, to be generalized across all lines and across enterprise, our initiative is to take care of the clients.

Sandy: What are some other revenue generators that you’re exploring right now?

Mike: Yeah, it’s — I think we’re looking at a number of revenue models, not just in delivering product but also in delivering services. So, for example, we just got off the aspect of talking about the mono lines. If I can provide a mono line company, other resources or one of my channels to supplement their needs. So, if you take a very strong life insurer, provide them the opportunity to do home and auto, or take a home and auto provider and give them the opportunity to sell group insurance or to sell life and living benefits or to sell investments. What it does is it provides them a greater span. The problem is is most of these individuals or organizations don’t have those skills and I’m very proud about the fact we’ve developed those skills and we’ve become quite good at it in creating a cross-enterprise relationship depth that we can take to the market. And so, in doing that, you know, there’s gonna be a fee for that, whether that’s part of the service fee, whether that’s part of the commissions, but there will be a fee to that but what it does is it gives a broker, gives an agent, gives a company greater retention of the long-term value of that client and that’s just one of the areas we’re looking at. The other areas, we’re looking at niche categories of the business. You know, again, it’s been talked about for a long time of whether that’s CPAs, military, first responders, looking at different elements and being able to fit those needs and those family categories over time. So, we’re continuing to look at that and continuing to build upon that so that we can hit the market running in the right way but meet them where they sit as opposed to just creating a fancy new product which isn’t what they want. They want a process. And being able to embed ourselves in a number of our competitors to do that allows them access to the model without having to make the investment, which probably is out of the category right now.

Sandy: Do you see carriers moving towards concentrating on being only product manufacturer or distributor or do you see them still trying to do both?

Mike: Yeah, I think it depends — I really think it depends on the manufacturer. Some manufacturers are incredibly strong at that. I think what being able to not only deliver and distribute product in addition to producing product is it’s a great test case. You’re able to look at the market, how they react to certain models and broaden it out. I don’t think there’s gonna be a line in the sand that companies make a decision to absolutely do one or the other. I think what companies need to look at is more of, “Are you gonna be multi-line or are you gonna be mono line?” and that’s their current challenge. Because if you mono line, you’re gonna be outpaced by everyone else. But also when we look at it, we have such a consolidation in the MGA and AGA market because the smaller groups are having such a hard time creating those relationships and being a value to producing entities and I think, as a whole, they have to get better, they have to bond together and open up the doors as opposed to, you know, if you will, we used to be very protective of our blocks of business, right? We used to sit there and say, “Okay, I’ve got my thousand clients or 5,000 or a million clients, no one’s gonna touch them,” but the reality is whether it’s in the States or in Canada, a big part of our new business are just exchanges of the clients, between, about 35 percent is an exchange between companies, because they’ve changed product lines, they’ve changed pricing, they’ve changed underwriting. But the reality is is that can’t be the ongoing model. It has to be how do we engage generally to meet the needs where they’re at and being able to look at it more consistently and making it easier to engage versus just saying, “I’m a great life insurer and I’m gonna provide term UL and whole and that’s all I’m gonna do for the rest of time.” I think that’s gonna be very challenging for any organization.

Sandy: How is RBC dealing with tech debt and investing in new technology?

Mike: That’s a very good question and what we do is we do a layout, obviously, the financials for if it’s replacing manual work, whether that’s reconciliation, paperwork to paper apps and we’ve been able to do that. I think the next challenge is taking, if I wanna invest in new technology, how does that operate in concert with what I have? We’re still in the process, and to be perfectly candid, we’re still in the process of replacing a lot of manual systems and multigenerational technology systems that are outdated. I mean, we still have COBOL programmers. And so, what we’re doing is trying to consolidate all of that into a technology network that we can have one solution to be able to go to what they call the data lake, to be able to dip into that data lake and be able to draw those proficiencies out long term and then we can be a lot more nimble and, in the current term, pivot a lot faster than we’ve ever been able to do.

Sandy: Mike, thank you for your time today. Really appreciate being able to learn more about how you and RBC are trying to grow your bottom line and stay relevant in this post COVID-19 world.

Mike: Great. Thanks, Sandy.

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